THE TWENTY-FIRST CENTURY INVESTMENT ENQUIRY WARNS THAT THERE IS MUCH AMISS WITH THE FINANCIAL SERVICES INDUSTRY.

Over a year ago, a team of extremely worthy and experienced people published the results of their enquiry into investment and the financial services industry.
Before their report, Restoring Trust, Investment in the Twenty-First Century was published, Sir Richard Sykes, the enquiry team chair generated a stir in City dovecotes by saying: "A casual observer of the financial scene could be forgiven for thinking that the whole investment system is fatally flawed or irreparably broken. Advisers and fund managers failing to help savers and institutions starving UK industry and commerce of their life blood"

In their report, under the heading, The Financial Services Industry, the committee say:

The trust and confidence of investors has been damaged. There have been examples of herd-like behaviour, the creation of unrealistic expectations, lack of transparency and failures to manage conflicts of interest. The value added by active fund management is not always apparent. There are concerns expressed about the level of earnings within some City institutions, and questions as to whether they apply themselves the same rigorous governance standards that they demand of quoted companies.
The methods used by some of those involved in investment and savings to achieve sales targets have tarnished the industry's reputation. The approach has been sales-driven and not needs-focused. There is a danger that the overall investment 'cake' may therefore diminish, as people look for alternative means of providing for their future.
Its time for the financial services industry to focus on collaborating along the supply chain to create value for the ultimate customer.

We couldn't agree more! These are strong words indeed from a committee consisting of many worthies from the industry itself and supported by the Bank of England, the Corporation of London, the Department of Work and Pensions, HM Treasury and the National Association of Pension Funds, as well as a galaxy of the Great and Good from industry and the City.
So what has happened since the publication of the report? We hoped that there was purposeful work going on behind the scenes to reform an industry that has become even more irresponsible, speculative and reckless since the report was published.
So we asked an insider who was very close to the enquiry what was happening. "Nothing", he said, "The City didn't like the report".